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Know the details of Medicare, Social Security

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By Michelle Singletary
A recent column about the importance of getting your Social Security statement prompted a lot of retirement questions from readers.
In turn, the questions reminded me just how complicated it is to retire these days. We chide people for not saving enough, but as one reader noted, thatís almost the easy part. Trying to understand the many rules and caveats to the rules makes planning for retirement so difficult.
Readers wanted to know about a plan by Social Security to resume paper statements. Some had tried to get an online statement but couldnít. And others had questions about the penalty for not signing up for Medicare Part B on time.
Iíll start with Medicare Part B. In the earlier column, I mentioned that if you donít sign up for Part B (medical insurance) when you become eligible at 65, you may have to pay a late enrollment penalty. I should have also made it clear that there are important exceptions to this penalty should you continue to work at 65 and beyond.
You arenít subject to a penalty if you or your spouse (or family member if youíre disabled) is still working and you have health insurance through your job or union. Some military retirees and international volunteers are also exempt. And this is important to note: COBRA and retiree health plans arenít considered coverage based on current employment.
So what happens if you drop the employer coverage?
This is another window you have to make sure doesnít close. As explains, once your employment ends or the group health plan insurance based on current employment ends, whichever happens first, you have an eight-month special enrollment period to sign up for Part B.
So the point is, be sure you know whether or not you need to sign up for the various Medicare parts before your 65th birthday. You can sign up anytime from three months before your birthday until three months after. Also be mindful of when you need to sign up for Medicare Part D (drug coverage) to avoid a penalty for late enrollment, a social worker who assists Medicare beneficiaries in Philadelphia wanted me to tell folks.
As part of your retirement planning, you can find out when you need to apply by going to and typing ďEligibility & Premium CalculatorĒ in the search field. Youíll answer just a few questions to find out your initial enrollment period.
And about that 10 percent Part B penalty, one reader asked what it is based on and how itís calculated.
Your monthly premium can increase 10 percent for each full 12-month period that you could have had Part B but didnít sign up for it. Itís calculated as a percentage of the standard monthly premium amount, which for 2014 is $104.90.
ďIf premiums increase in a given year, the dollar value of the surcharge will increase as well,Ē wrote Patricia Davis, a specialist in health care financing, in a Congressional Research Service report prepared for members of Congress.
Hereís an example that Davis gives. Letís say someoneís initial enrollment period ended in September 2011 but the person signed up during the 2012 general enrollment period (Jan. 1 through March 31). The delay was less than 12 months so there wouldnít be a penalty. But if the person waited until the 2014 general enrollment period, the penalty would increase the monthly premium by 20 percent to $125.88 a month ($104.90 plus 20 percent). The penalty doesnít jump to 30 percent because the delayed enrollment includes only two full 12-month periods.
In 2012, about 1.5 percent of Part B enrollees paid a penalty for late enrollment, according to Davis. On average, the total premiums, which included the penalty, were about 31 percent higher than what they would have been without the extra charge.
As for signing up online to get your Social Security statement, some readers reported having trouble getting through the verification process. If you are having trouble passing the authentication process, you can visit a local Social Security office where youíll get an activation code, said Social Security spokeswoman Kia Anderson. Anderson said you would then go to and enter it to establish an online account.
Although Social Security is aggressively pushing for people to go online to get their statements, the agency will resume mailing statements to some workers. Beginning in September, workers who are turning 25, 30, 35, 40, 45, 50, 55, 60 and over who are not receiving Social Security benefits and not registered online will be mailed a statement.
The lesson in all this: Find out what you need to do long before you plan on retiring. Then plan, plan, plan.
Michelle Singletary:
Washington Post Writers Group
Story tags » Personal FinanceSocial security



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